Question 1

Figure 13-4 
-Refer to Figure 13-4.Curve D is increasing because of

Accepted Answer

A)   diminishing marginal product.
B)   increasing marginal product.
C)   the fact that increasing marginal product follows decreasing marginal product.
D)   the fact that decreasing marginal product follows increasing marginal product.E) A) and B)
F) None of the above

Question 2

The shape of the total cost curve is related to the shape of the production function.

Accepted Answer

A) True 
 B)False

Question 3

XYZ corporation produced 300 units of output but sold only 275 of the units it produced.The average cost of production for each unit of output produced was $100.Each of the 275 units sold was sold for a price of $95.Total profit for the XYZ corporation would be

Accepted Answer

A)   -$3,875.
B)   $26,125.
C)   $28,500.
D)   $30,000.E) All of the above
F) A) and D)

Question 4

Johnny is a sophomore in college and has a 1.5 cumulative grade point average (GPA) .Johnny's cumulative GPA will be better next semester if he

Accepted Answer

A)   (ii) only
B)   (iii) only
C)   (i) and (ii) 
D)   (ii) and (iii) E) B) and C)
F) A) and D)

Question 5

Average total cost tells us the

Accepted Answer

A)   total cost of the first unit of output,if total cost is divided evenly over all the units produced.
B)   cost of a typical unit of output,if total cost is divided evenly over all the units produced.
C)   cost of the last unit of output,if total cost does not include a fixed cost component.
D)   variable cost of a firm that is producing at least one unit of output.E) A) and D)
F) C) and D)

Question 6

Table 13-11
 
-Refer to Table 13-11.What is average fixed cost when output is 40 units?

Accepted Answer

A)   $1.00
B)   $3.32
C)   $5.00
D)   $8.00E) B) and C)
F) C) and D)

Question 7

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed.This assumption is often realistic

Accepted Answer

A)   in the short run but not in the long run.
B)   in the long run but not in the short run.
C)   both in the short run and in the long run.
D)   neither in the short run nor in the long run.E) C) and D)
F) None of the above

Question 8

Which of the following must always be true as the quantity of output increases?

Accepted Answer

A)   Marginal cost must rise.
B)   Average total cost must rise.
C)   Average variable cost must rise.
D)   Average fixed cost must fall.E) B) and C)
F) A) and C)

Question 9

Scenario 13-6
A certain firm produces and sells staplers.Last year,it produced 7,000 staplers and sold each stapler for $6.In producing the 7,000 staplers,it incurred variable costs of $28,000 and a total cost of $45,000.
-Refer to Scenario 13-6.The firm's fixed costs amounted to

Accepted Answer

A)   $7,000.
B)   $17,000.
C)   $28,000.
D)   $42,000.E) All of the above
F) B) and C)

Question 10

Table 13-11
 
-Refer to Table 13-11.What is average variable cost when output is 50 units?

Accepted Answer

A)   $3.60
B)   $4.00
C)   $4.40
D)   $4.80E) A) and B)
F) All of the above

Question 11

Marginal cost equals

Accepted Answer

A)   total cost divided by quantity of output produced.
B)   total output divided by the change in total cost.
C)   the slope of the total cost curve.
D)   the slope of the line drawn from the origin to the total cost curve.E) C) and D)
F) A) and D)

Question 12

Randy is a minor-league baseball player.His current cumulative batting average is 0.270.Randy believes that if he can raise his cumulative batting average to 0.300,he will have a chance to play in the major leagues.Which of the following statements is correct?

Accepted Answer

A)   If Randy gets between 27 and 30 hits out of his next 100 at bats,he will be able to raise his cumulative batting average to 0.300.
B)   If Randy gets 30 hits out of his next 100 at bats,he will be able to raise his cumulative batting average to 0.300.
C)   Randy must get more than 30 hits out of his next 100 at bats in order to raise his cumulative batting average to 0.300.
D)   Either b or c could be correct.E) A) and C)
F) A) and B)

Question 13

Figure 13-4 
-Refer to Figure 13-4.Curve A is always declining because of

Accepted Answer

A)   diminishing marginal product.
B)   dividing fixed costs by higher and higher levels of output.
C)   the fact that increasing marginal product follows decreasing marginal product.
D)   the fact that decreasing marginal product follows increasing marginal product.E) B) and D)
F) None of the above

Question 14

Zoe sells 200 glasses of lemonade at $0.50 each.Her total costs are $25.Her profits are

Accepted Answer

A)   $25.
B)   $75.
C)   $100.
D)   $175.E) A) and B)
F) A) and C)

Question 15

Accounting profit is equal to

Accepted Answer

A)   marginal revenue minus marginal cost.
B)   total revenue minus the explicit cost of producing goods and services.
C)   total revenue minus the opportunity cost of producing goods and services.
D)   average revenue minus the average cost of producing the last unit of a good or service.E) None of the above
F) B) and C)

Question 16

In the short run,a firm that produces and sells computers can adjust

Accepted Answer

A)   how many workers to hire.
B)   the size of its factories.
C)   where to produce along its long-run average-total-cost curve.
D)   All of the above are correct.E) C) and D)
F) A) and C)

Question 17

Economists assume that the goal of the firm is to maximize total

Accepted Answer

A)   revenue.
B)   profits.
C)   costs.
D)   satisfaction.E) A) and B)
F) A) and C)

Question 18

Diminishing marginal product exists when the total cost curve becomes flatter as outputs increases.

Accepted Answer

A) True 
 B)False

Question 19

Figure 13-4 
-Refer to Figure 13-4.Curve D represents which type of cost curve?

Accepted Answer

A)   marginal cost
B)   average total cost
C)   average variable cost
D)   average fixed costE) A) and B)
F) B) and D)

Question 20

If the total cost curve gets steeper as output increases,the firm is experiencing

Accepted Answer

A)   diseconomies of scale.
B)   economies of scale.
C)   diminishing marginal product.
D)   increasing marginal product.E) A) and D)
F) A) and C)

Exam 13: The Costs of Production

Table 13-11 -Refer to Table 13-11.What is average variable cost when output is 50 units?

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Johnny is a sophomore in college and has a 1.5 cumulative grade point average (GPA) .Johnny's cumulative GPA will be better next semester if he

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If the total cost curve gets steeper as output increases,the firm is experiencing

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Figure 13-4 -Refer to Figure 13-4.Curve A is always declining because of

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Randy is a minor-league baseball player.His current cumulative batting average is 0.270.Randy believes that if he can raise his cumulative batting average to 0.300,he will have a chance to play in the major leagues.Which of the following statements is correct?

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Accounting profit is equal to

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XYZ corporation produced 300 units of output but sold only 275 of the units it produced.The average cost of production for each unit of output produced was $100.Each of the 275 units sold was sold for a price of $95.Total profit for the XYZ corporation would be

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Table 13-11 -Refer to Table 13-11.What is average fixed cost when output is 40 units?

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Scenario 13-6 A certain firm produces and sells staplers.Last year,it produced 7,000 staplers and sold each stapler for $6.In producing the 7,000 staplers,it incurred variable costs of $28,000 and a total cost of $45,000. -Refer to Scenario 13-6.The firm's fixed costs amounted to

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Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed.This assumption is often realistic

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Figure 13-4 -Refer to Figure 13-4.Curve D represents which type of cost curve?

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Average total cost tells us the

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Zoe sells 200 glasses of lemonade at $0.50 each.Her total costs are $25.Her profits are

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Marginal cost equals

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Figure 13-4 -Refer to Figure 13-4.Curve D is increasing because of

Correct AnswerverifiedShow Answer

In the short run,a firm that produces and sells computers can adjust

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Economists assume that the goal of the firm is to maximize total

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Diminishing marginal product exists when the total cost curve becomes flatter as outputs increases.

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Which of the following must always be true as the quantity of output increases?

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The shape of the total cost curve is related to the shape of the production function.

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